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Houston Area Employment — July 2018

Total nonfarm employment in the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area stood at 3,113,100 in July 2018, up 101,800 or 3.4 percent, from one year earlier, the U.S. Bureau of Labor Statistics reported today. During the same period, the national job count increased 1.6 percent. Assistant Commissioner for Regional Operations Stanley W. Suchman noted that July marked the first period of local annual job growth exceeding 100,000 since February 2015. July also marked the ninth consecutive month that Houston’s rate of job growth has exceeded the U.S. average. Prior to this period, annual local job growth rates had been below the national average for more than two years. (See chart 1 and table 1; the Technical Note at the end of this release contains metropolitan area definitions. All data in this release are not seasonally adjusted; accordingly, over-the-year analysis is used throughout.)

Industry employment

In the Houston metropolitan area, professional and business services added the largest number of jobs from July 2017 to July 2018, up 40,900. Job gains in the sector were large in the employment services industry which added 13,500 jobs, a 16.4-percent increase over the year. Houston’s professional and business services employment rose 8.5 percent since July 2017, more than three times the national increase of 2.6 percent. (See table 1 and chart 2.)

Construction added 25,500 jobs locally from July a year ago, the second-largest job gain among the supersectors. Job gains occurred in each of the three reporting industries, with the largest gain in construction of buildings, up 15,200 or 26.9 percent. Area employment in the construction supersector climbed 11.9 percent compared to the 4.2-percent gain for the nation.

Trade, transportation, and utilities, Houston’s largest employer, added 15,300 jobs from July 2017 to July 2018. Employment rose in all three sub-sectors: wholesale trade (+5,000); retail trade (+8,000); and transportation, warehousing, and utilities (+2,300). Over the year, local employment in the trade, transportation, and utilities sector increased 2.5 percent, more than double the 1.2-percent nationwide increase.

Manufacturing in Houston added 6,500 jobs from July 2017 to July 2018, marking the ninth consecutive month of annual growth. The local durable goods manufacturing industry produced all of the sector’s job growth over the year, with fabricated metal product manufacturing adding nearly half of the sector’s jobs (+3,100). Area employment in manufacturing rose 2.9 percent from July a year ago, compared to 2.6 percent nationally.

Houston’s education and health services employment rose 5,600 from July a year ago. This gain represented a 1.5-percent increase locally, below the national advance of 1.8 percent. However, Houston’s 1.5-percent job gain was the fastest annual rate for this local sector since August 2017.

Financial activities added 3,200 jobs from July 2017 in the Houston area; nearly all of the sector growth occurred in the real estate and rental and leasing industry. Local employment in the sector rose 2.0 percent compared to the 1.3-percent increase nationwide.

Three other local sectors had annual job gains of at least 1,300: leisure and hospitality (+2,600), mining and logging (+1,400), and government (+1,300). Only one Houston supersector, information, lost jobs from July 2017 to July 2018 (-1,000).

Employment in the 12 largest metropolitan areas

Houston-The Woodlands-Sugar Land was 1 of the nation’s 12 largest metropolitan statistical areas in July 2018. All 12 areas had over-the-year job growth during the period, with the rates of job growth in 8 areas exceeding the national increase of 1.6 percent. Houston (+3.4 percent), Dallas-Fort Worth-Arlington (+3.3 percent), and Phoenix-Mesa-Scottsdale (+3.1 percent) had the fastest rates of job growth. Los Angeles-Long Beach-Anaheim (+1.1 percent) and Chicago-Naperville-Elgin (+1.3 percent) had the slowest rates of job growth. (See chart 3 and table 2.)

New York-Newark-Jersey City added the largest number of jobs over the year, 143,000, followed by Dallas (+118,200) and Houston (+101,800). San Francisco-Oakland-Hayward had the smallest employment gain over the year, adding 39,400 jobs. Annual gains in the remaining eight metropolitan areas ranged from 77,100 in Washington-Arlington-Alexandria to 45,800 in Miami-Fort Lauderdale-West Palm Beach.

Over the year, professional and business services added the most jobs in five areas: Boston-Cambridge-Nashua, Dallas, Houston, San Francisco, and Washington. Construction gained the most jobs in three areas: Chicago, Miami, and Phoenix.

Information recorded the largest employment loss in four areas: Atlanta-Sandy Springs-Roswell, Chicago, Houston, and Philadelphia-Camden-Wilmington. Dallas and Washington were the only metropolitan areas to record no losses in any supersector.

Metropolitan area employment data for August 2018 are scheduled to be released on Friday, September 21, 2018, at 10:00 a.m. (ET).

Technical Note

This release presents nonfarm payroll employment estimates from the Current Employment Statistics (CES) program. The CES survey is a Federal-State cooperative endeavor between State employment security agencies and the Bureau of Labor Statistics.

Definitions. Employment data refer to persons on establishment payrolls who receive pay for any part of the pay period that includes the 12th of the month. Persons are counted at their place of work rather than at their place of residence; those appearing on more than one payroll are counted on each payroll. Industries are classified on the basis of their principal activity in accordance with the 2012 version of the North American Industry Classification System.

Method of estimation. CES State and Area employment data are produced using several estimation procedures. Where possible these data are produced using a "weighted link relative" estimation technique in which a ratio of current-month weighted employment to that of the previous-month weighted employment is computed from a sample of establishments reporting for both months. The estimates of employment for the current month are then obtained by multiplying these ratios by the previous month's employment estimates. The weighted link relative technique is utilized for data series where the sample size meets certain statistical criteria.

For some employment series, the sample of establishments is very small or highly variable. In these cases, a model-based approach is used in estimation. These models use the direct sample estimates (described above), combined with forecasts of historical (benchmarked) data to decrease volatility in estimation. Two different models (Fay-Herriot Model and Small Domain Model) are used depending on the industry level being estimated. For more detailed information about each model, refer to the BLS Handbook of Methods.

Annual revisions. Employment estimates are adjusted annually to a complete count of jobs, called benchmarks, derived principally from tax reports that are submitted by employers who are covered under state unemployment insurance (UI) laws. The benchmark information is used to adjust the monthly estimates between the new benchmark and the preceding one and also to establish the level of employment for the new benchmark month. Thus, the benchmarking process establishes the level of employment, and the sample is used to measure the month-to-month changes in the level for the subsequent months.

Reliability of the estimates. The estimates presented in this release are based on sample surveys, administrative data, and modeling and, thus, are subject to sampling and other types of errors. Sampling error is a measure of sampling variability–that is, variation that occurs by chance because a sample rather than the entire population is surveyed. Survey data also are subject to nonsampling errors, such as those which can be introduced into the data collection and processing operations. Estimates not directly derived from sample surveys are subject to additional errors resulting from the specific estimation processes used. The sums of individual items may not always equal the totals shown in the same tables because of rounding.

Employment estimates. Measures of sampling error for the total private employment series are available for metropolitan areas and metropolitan divisions at www.bls.gov/sae/790stderr.htm. Measures of sampling error for more detailed series at the area and division level are available upon request. Measures of sampling error for states down to the supersector level are available on the BLS website at www.bls.gov/sae/790stderr.htm. Measures of nonsampling error are not available for the areas contained in this release. Information on recent benchmark revisions is available online at www.bls.gov/sae/benchmark2017.pdf

Area definitions. The substate area data published in this release reflect the delineations issued by the U.S. Office of Management and Budget, dated July 15, 2015. A detailed list of the geographic definitions is available at www.bls.gov/lau/lausmsa.htm.

More complete information on the technical procedures used to develop these estimates and additional data appear in Employment and Earnings, which is available online at www.bls.gov/opub/ee/home.htm. Industry employment data for states and metropolitan areas from the Current Employment Statistics program are also available in the above mentioned news releases and from the Internet at www.bls.gov/sae/.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.

Table 1. Employees on nonfarm payrolls by industry supersector, United States and Houston metropolitan area, not seasonally adjusted (numbers in thousands)